If a company that uses a perpetual inventory system sold merchandise which cost $1,000 for a selling price of $3,000,the accounting equation would show a:

Question

Quizplus · Accepted Answer

Since the company uses a perpetual inventory system, the cost of the merchandise sold would be debited to Cost of Goods Sold and the selling price would be credited to Sales. This transaction would result in a net increase in assets (cash or accounts receivable from the sale) and a net increase in stockholders' equity (due to the increase in revenue and decrease in expense). Therefore, A is the correct answer.

If a Company That Uses a Perpetual Inventory System Sold